OpenHydro, an Irish tidal energy company which has not yet commenced operations, has raised €7 million in private equity funding.
The company has appointed Davy as its corporate financial advisors and intends to conduct larger funding rounds in the future. Most of the investors to date have been Irish individuals putting in €250,000, though there have also been some corporate investors.
The company, set up in late 2004, closed a €4.5 million funding round in 2005. It has just closed a futher round which was over-subscribed and which raised €2.5 million to support the business into 2007. It has up to now operated without a public profile.
In the coming fortnight OpenHydro is set to place a six-metre diameter tidal turbine at the groundbreaking European Marine Energy Centre (EMEC) in Orkney, Scotland. The turbine will be connected to the electricity grid.
The UK and Ireland are tidal energy "hotspots" according to OpenHydro chief financial officer, Peter Corcoran. The islands form one of a number of areas around the globe that have the potential to create electricity worth €10 billion per year or more from tidal motion.
OpenHydro plans to deploy farms of tidal turbines under the world's oceans that will silently and invisibly generate electricity. The company's open-centre turbine technology allows for the generation of electricity at little cost to the environment and without the turbines needing regular servicing.
The company was set up in 2004 after 24-year old accountant Donal O'Flynn discussed Ireland's potential for tidal energy production with businessman Brendan Gilmore. The two men conducted a global technology search and teamed up with the inventor of the open-centre turbine, Florida-based Irish-American Herbert Williams.
These three together have a majority shareholding in OpenHydro, which they control.
Working with a small technology team in Ireland, the company further developed the turbine and permission was granted for the installation at EMEC.
"When we first approached EMEC we were fifth in the queue, but now we will be first to install," said Mr Corcoran. This change occurred because other companies were developing "tank test models", whereas Mr Williams had been working on his turbine for ten years, Mr Corcoran said.
Mr Gilmore, chairman of the company, said its goal is to develop OpenHydro's technology into the leading technology for installing tidal energy farms on a global basis.
"Tidal energy, as world government agencies have recognised, will make a major contribution to reducing our dependence on fossil fuels. It will also be an enormous asset to Ireland and the UK - significantly reducing the dependence on fossil fuel importation," Mr Gilmore said.
Mr Corcoran said that tidal energy will form part of the mix of renewable energy sources which will be used in the period to come to reduce dependence on fossil fuels.
OpenHydro has patented the turbines developed by Mr Williams, which use magnets and coils to produce energy. It plans to make, sell, install and maintain these turbines, and in some cases take equity stakes in tidal farms.
Mr Corcoran said that Ireland lags behind the UK in the development of this source of energy generation, but that both Ireland and Britain have the advantage that they have notof not having given licences tofor favourable sites to entities that do not wantto, or are unable, to to, develop them.
"We need the licences to go to the people who are going to use them," he said.
